Rebirth of the Capital Legend

“I’m afraid that ‘Fuxing Road’ has already successfully taken profits and exited the market,” Zhao Zhiyuan said. “‘Dongfang Yuhong’ hasn’t been on the list of top gainers and losers for a long time. Although the stock has hit a high point before, its recent adjustment trend is still a relatively strong sideways adjustment, and the trading volume has not increased significantly.”

However, if 'Fuxing Road' is sold off little by little, based on the recent average transaction amount of 'Oriental Yuhong' stock...

It can also emerge silently, right?

I feel that if 'Fuxing Road' is still locked up, there's no reason why it shouldn't continue to guide the market.

After all, the overall sentiment in the "major infrastructure" sector was actually quite good yesterday and today. Given the stock's previous performance, if the overall sentiment had been this strong, the stock would probably have already hit the daily limit. But now... the performance of "Oriental Yuhong" is significantly weaker than the performance of the major industry sector indices related to the "major infrastructure" theme, and also weaker than the average increase of many popular stocks in this theme.

Not to mention that this stock is strong, its performance is even somewhat dragging down the overall market.

If it weren't for the fact that the stock 'Oriental Yuhong' didn't open as expected and didn't show any proactive upward momentum after the market officially opened, it would have been a different story.

Numerous major capital groups within the market.

If we were to pursue large-scale infrastructure projects, we wouldn't be as hesitant as we are now.

Perhaps, even without this particular stock dragging things down, the "major infrastructure" sector, led by a host of popular stocks like Huaxin Cement, Tianshan Cement, Shougang Group, and Beijiang Jiaojian, would have already generated a very strong profit-making effect, and even boosted other main market themes.

“‘Fuxing Road’ funds must have at least 4 million yuan invested in ‘Oriental Yuhong’ stock, right?” Liang Jiucheng said. “With such a large amount of holdings, based on the recent trading volume of ‘Oriental Yuhong’ stock, it’s impossible for them to exit safely. Let alone 4 million yuan, even if it were around 1 million yuan, continuous selling would not leave any trace on the trading screen.”

Moreover, 'Oriental Yuhong' is the most popular core stock in the 'major infrastructure' theme.

The entire market is under constant scrutiny.

If the funds from 'Fuxing Road' showed clear signs of leaving the market, it's impossible that no one in the entire market would have noticed or discovered it.

However, there is currently no relevant news in the market.

Furthermore, there's the influence and reputation of the 'Fuxing Road' seats.

There was absolutely no need for the other party to do that.

Because once this is done, regardless of how much money is made, this blatant act of exploiting retail investors and those following the trend will inevitably severely damage the influence and reputation of this type of trading platform.

Don't forget the funds from 'Fuxing Road'...

In other words, Huayi Capital, besides holding a large position in Oriental Yuhong, also holds hundreds of billions of yuan worth of shares in the two major consumer sectors of "liquor" and "white goods" within the "major infrastructure" sector.

If we ruin our reputation on the 'Oriental Yuhong' check.

This will inevitably affect the other stocks in which it holds a large number of shares.

At that time, the hundreds of millions of profits reaped from 'Oriental Yuhong' will most likely not be enough to cover the drawdown losses from other stocks.

From this perspective, isn't 'Fuxing Road's' covert withdrawal, leaving countless funds that followed the influence of this seat stranded at the top of the mountain, a case of penny-wise and pound-foolish?
Therefore, I conclude that the funds from 'Fuxing Road' are tied up in the 'Oriental Yuhong' stock.

If someone really wants to reduce their holdings to take profits, or even liquidate their positions to exit, they will not do so quietly; they will definitely make a big, public exit.

However, without publicly stating that it would liquidate its holdings and withdraw.

Regardless of its short-term performance, Oriental Yuhong remains a leading stock in the "major infrastructure" theme driven by the "Fuxing Road" development strategy.

Furthermore, its trajectory will inevitably have a significant impact on the "major infrastructure" sector.

“I think Brother Liang is right.” Zhang Wei pondered for a while and replied, “It is indeed unlikely that a fund of the size of ‘Huayi Capital’ would do such a sneaky thing. At the same time, based on the past operation methods and experience of ‘Fuxing Road’, it is not the kind of major speculative fund that secretly runs away and reaps the benefits of retail investors following the trend. On the contrary, it is the kind of major speculative fund that is open, straightforward, and decisive.”

However, I think...

At present, the stock 'Oriental Yuhong' has indeed risen quite a bit from its bottom.

Having more than doubled from the bottom, and generally exceeding the average increase of 50% for other stocks in the 'major infrastructure' sector.

Given that subsequent expectations have not yet been realized and the performance remains uncertain.

Even with the support of the 'Fuxing Road' seat, it feels like there's a lack of momentum to keep going up.

This is also the fundamental reason why this stock has recently underperformed the industry sector index related to the 'major infrastructure' theme, as well as other popular concept stocks.

Judging from the current sentiment and trend feedback of major stocks related to the 'major infrastructure' theme.

Clearly, the stocks most heavily traded by short-term speculative funds are 'Huaxin Cement', 'Tianshan Cement', 'Shougang Group', 'Beijiang Jiaojian', and so on.

And if you really want to speculate on this main trend.

I think we should start with these popular stocks that are most popular but relatively low in price.

Of course, just like you said before, Lao Liang...

Although the driving effect of "Oriental Yuhong" on the "major infrastructure" sector is declining, it still hasn't experienced a sharp drop against the trend when the "major infrastructure" sector shows a clear upward momentum. In other words, while its upward driving effect on the "major infrastructure" sector may be weakening, its downward pressure on the sector remains very strong.

"In any case, this check has definitely been downgraded in terms of short-term trading priority," Zhao Zhiyuan continued. "This can also be seen from the trading activity of this check."

Actually, I think this is after the stock price is at a relatively high level.

The dominant position of the funds in the 'Fuxing Road' sector has ironically become a suppressive force that limits the further upward movement of this stock.

Because 'Fuxing Road' has been continuously locking up its shares, many investors who followed 'Fuxing Road' in this stock have also locked up their shares. This makes it extremely difficult to fully adjust the internal shareholding structure of 'Oriental Yuhong'.

In other words, there were too many people sitting in sedan chairs, while the number of people carrying the sedan chairs gradually decreased.

Furthermore, given that the funds from 'Fuxing Road' have already accumulated a significant stake in 'Oriental Yuhong' near the disclosure threshold, the likelihood of 'Fuxing Road' continuing to buy heavily and raise its stake further is extremely low.

In other words, as the stock price rises further, or as time goes on, the only likely option for 'Fuxing Road' in this stock is to gradually reduce its holdings.

Regardless of where 'Fuxing Road' is located or when the reduction of holdings will take place.

Once this expectation is formed.

Therefore, if the internal shareholding structure is heavy and there is too much capital sitting on the sidelines, the funds outside the market that would be willing to push the price up will not be too active.

This is also due to the overall recovery in sentiment surrounding the "major infrastructure" theme.

The reason why they would rather set up a separate table to hype up a new leading concept stock than gather together again to continue hyping up the stock 'Oriental Yuhong'.

So I think...

Even along the 'major infrastructure' theme, bullish sentiment continues to rise.

The previous positive and one-sided upward trend of 'Oriental Yuhong' stock will not be repeated.

Unless there are positive factors that were widely expected beforehand, and the company's fundamentals and performance were indeed in a state of explosive growth, the actual realization of these factors far exceeded expectations.

Then, driven by performance,

Its valuation has been passively increased.

This check may still have a period of good market performance.

However, the time frame for exceeding expectations after such expectations are met can be very long, and the probability of it happening is not particularly high.

So, in general, it's better to stick to 'Oriental Yuhong', a stock that has been a hot topic in the past.

It's better to choose a new leading stock in a new concept to speculate on.

At least for now, in terms of the trend of the "major infrastructure" sector, stocks such as "Huaxin Cement," "Tianshan Cement," "Beijiang Jiaojian," and "Shougang Group" have indeed received the best and strongest support from speculative funds and have shown the best performance in terms of market trends.

Short-term trading, and even ultra-short-term trading.

We naturally gravitate towards where the strength lies and where funds concentrate.

Why cling to the outdated brand 'Oriental Yuhong'?

Anyway, I have no intention of buying 'Oriental Yuhong' at its current price, unless it can continue to fall by more than 30% while 'Fuxing Road' remains locked in.

“Uh…” Liang Jiucheng said, “If ‘Oriental Yuhong’ drops by 30%, then the index will most likely have already fallen below 3000 points again. At that time… the bullish logic of the entire market will change, and the holding logic of many stocks in the market will also change. In that case, will ‘Oriental Yuhong’ still be worth buying? Will there still be any need to buy it?”

In my opinion, the core, popular, leading stocks.

It's not necessarily true that the lower the position or the lower the stock price, the better.

Sometimes, stocks become cheaper as they rise; the higher the price, the lower the valuation and the higher the certainty.

“Sigh, let’s not talk about the ‘Oriental Yuhong’ stock anymore.” Hearing the two’s huge disagreement, Zhang Wei sighed and changed the subject, saying, “After the market officially opened for trading, the market trend in the first ten minutes showed that the overall trading volume was lacking.”

In today's market trend, trading volume remained insufficient, and liquidity issues persisted.

I feel that the capacity to handle the load is insufficient.

Even though there is some bullish sentiment supporting the 'major infrastructure' sector, it's unlikely to break out of this pattern.

If this core theme, which was highly anticipated by the market's vast investor base and the large number of speculative funds following the trend before the market opened and in the early stages of trading, fails to emerge and generate a concentrated and sustained profit-making effect, then the overall market trend today feels very dangerous.

Currently, the 'emerging industrial chain' line...

Apart from the three stocks that have already hit their daily limit down: 'Huawen Online', 'Huawen Media', and 'Yue Media'.

Other stocks such as 2345, Yinzhijie, Renzihang, and Huace Film & TV also collapsed across the board, plummeting to their daily limit down.

In addition, there was a continued sell-off in stocks such as LeTV, Netspeed Technology, Baofeng Technology, All-China Education, and Maruda Film & Television.

The entire 'emerging industrial chain' sector has been completely breached, resulting in a panic-driven sell-off.

If the "major infrastructure" theme fails to hold at this point and adjustments are needed, then further adjustments will be necessary.

It feels like the main trend of the entire market will inevitably be dragged down and spread by this panic, thus risking a breakdown in the trend.

I think today is clearly not a good day to open a position.

Defense is still more important.

"To avoid losing all the money you've earned before it's even had a chance to enjoy it."

"Yes, looking at the intraday chart and trading volume, today's trend is indeed very pessimistic." Liang Jiucheng nodded and continued his analysis, "'Huawen Online' has completely hit the daily limit down, and no funds dare to push it up, which means the 'emerging industry chain' sector is finished. Now, the panic selling in this sector is spreading to the entire market. The 'major infrastructure' sector is the only survivor in the entire market, but it is also in danger due to limited market liquidity."

"In the insurance, banking, and consumer sectors, there are signs of funds actively absorbing unusual activity," Liang Jiucheng analyzed. Zhao Zhiyuan, who is also closely monitoring market trends, said, "With the continued collapse of 'emerging industrial chains' and the ChiNext index falling by 2.3% intraday, risk aversion in the market has clearly resurfaced. Many risk-averse funds are abandoning the 'major infrastructure' sector and gradually concentrating on the 'major financial' sector, as well as the more stable and predictable sectors like liquor and white goods."

“This is not a good thing,” Zhang Wei frowned and said. “Risk aversion is rising rapidly, and market panic will continue to accelerate. If this situation continues, the ‘major infrastructure’ sector will inevitably collapse. And if the sentiment can’t hold up, once ‘Huaxin Cement’ stock price hits its limit and plunges, the market today will likely see a complete crash.”

"Small and mid-cap stocks have collapsed across the board." Liang Jiucheng said in a deep voice, his eyes sharp. "It seems the market is developing in the worst-case scenario everyone expected. The ChiNext index will probably need to confirm the previous support level. In this situation... we can't trade against the trend. The 'major infrastructure' sector will probably struggle to hold today. Everyone should reduce their positions quickly, whether it's to take profits or cut losses. It's crucial to keep some cash on hand. In a market where everything is falling, even the 'major financial' sector, which is considered a safe haven, as well as the liquor and white goods sectors, are not safe havens." (End of Chapter)